Hong Kong government endorses NEC as main contract suite

The Hong Kong government announced at the NEC Asia-Pacific Users’ Group annual conference in November 2016 that the NEC contract suite will be used for all future public works projects as far as practicable.

Hong Kong Development Bureau permanent secretary for development (works) and NEC Asia- Pacific Users’ Group chairman Hon Chi-keung told delegates he wished to use NEC to assist in managing construction costs so the government could deliver more with the spending allocated.

Promoting wider use
He said, ‘The government will be promoting wider use of NEC in more public works projects. NEC will be used for all contracts now unless there are justifiable reasons to do otherwise.

‘We will try to adopt NEC target cost options in larger scale and complex projects, such as those exceeding HK$1 billion. We believe NEC will help reducing uncertainties perceived by contractors and in turn lowering the tender risk premium as well.

‘Moreover, with the target cost arrangement, this could help in creating a team spirit environment for promoting cost-saving initiatives.’

Over 50 new contracts
He said the Bureau was on target to tender around 50 new NEC contracts during the current financial year, building on the success of the initial tranche of about 30 pilot NEC projects. Seven of these are now completed.

The Bureau has also recently published a set of NEC ECC practice notes, which will be discussed at an NEC Asia-Pacific Users’ Group breakfast meeting in early 2017.

Growing interest
The annual conference at the Cordis Hotel, Hong Kong was again well-attended, attracting over 120 industry practitioners and reflecting the evergrowing interest in NEC contracts throughout the Asia-Pacific region.

It included NEC case studies from major Hong Kong utilities MTR and CLP as well as workshops on good practice of using Z clauses, how to avoid and resolve disputes, and open-book accounting.

The day was concluded by an interactive panel discussion, a celebration of the 42 Hong Kong practitioners who successfully became Accredited NEC3 ECC Project Managers in 2016, a closing address from NEC Users’ Group secretary Robert Gerrard and a cocktail reception.

Industry support
The event was sponsored by BLP, Cemar, Chun Wo Development Holdings Limited, DGA Group, Kum Shing and Pinsent Masons.